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When we talk about housing affordability, we usually focus on home prices and mortgage rates. But property taxes are also part of the cost of owning a home. And in Florida, property taxes have increased significantly in recent years. According to Census data, the median annual real estate taxes for Florida homeowners with a mortgage increased from about $2,270 in 2019 to $3,353 in 2024. That’s an increase of 48% in five years. For homeowners, higher property taxes directly affect how much money they spend on housing every year. For buyers, higher property taxes mean both a higher monthly payment and more income needed to afford a home.

In Florida, Amendment 3 proposes to expand the homestead exemption for non-school property taxes to $150,000 in 2027 and $250,000 in 2028. This could reduce property taxes for eligible homeowners while school property taxes would remain unchanged.

But what do lower property taxes actually mean for housing affordability? Our analysis looks at how much the income needed to afford a home could change and how many more Florida households could meet that qualifying income.

Lower costs for existing homeowners

Existing homeowners can see the difference more directly. For example, the typical homeowner could save about $2,400 a year on property taxes, which is about $2001 more each month for other expenses, including insurance and maintenance. This is especially important in Florida, where homeowners have seen higher insurance costs in recent years. In the meantime, homeowners don’t stop paying property taxes when they pay off their mortgage. Homeowners who own their homes without a mortgage still need to pay taxes, insurance and maintenance. So, lower property taxes can also reduce one of those ongoing costs. Of course, not every homeowner would save the same amount, but lower property taxes would make it less expensive for eligible homeowners to own their homes.

Lower property taxes could also help buyers

As a part of the total cost of owning a home, property taxes affect the income needed to afford a home. For example, the median price of a single-family home in Florida was about $415,000 in August 2026. With a 10% down payment and a mortgage rate of 7.4%, the estimated monthly housing cost, including property taxes and insurance, comes to about $3,122. Assuming that housing costs don’t exceed 28% of the household income, the qualifying income to purchase the median-priced home is about $133,800 in Florida.

Now, let’s see what happens if property taxes are $200 lower each month. The monthly housing cost falls to $2,922, and the income needed to afford the same home drops to $125,200. That’s about $8,600 less income needed to afford the same home.

 

Based on the household income distribution in Florida, with these lower property taxes, about 242,000 additional households will be able to afford the median-priced home. The share of households earning enough to afford the median-priced home will increase from about 24% to 27%. This doesn’t mean that all these 242,000 more households will buy a home. Some already own, others may not be looking to buy, and not everyone would qualify for the expanded exemption. But it shows how lower property taxes could improve affordability for households whose incomes are close to what they need to purchase a home.

What about younger buyers?

We also looked at how lower property taxes can affect younger households. Florida has about 2.92 million households under the age of 45. Many of these households are at ages when people are buying their first home or planning to buy one. For this group, we used a starter home price of $352,750 or 85% of Florida’s median single-family home price. Today, a household needs to earn about $115,100 a year to afford this home. About 900,000 Florida households under 45 earn that income or 31% of these young households. If property taxes were $170 lower, the income needed to afford the same home could fall to about $107,800. That could bring about 93,500 additional younger households above the income threshold. That’s about 10% more younger households earning the qualifying income.

 

And looking specifically at younger renters (under 45 years old), we estimate that about 40,000 more younger renters could afford a starter home with lower property taxes. Specifically, Florida has about 1.56 million renter households under 45. Of those, about 266,000 earn enough to afford the starter home. That’s about 17% or about one in six of these young renters. With the proposed property tax reduction, that number could increase to about 307,000. So, based on the data above, looking at affordability and property taxes, lower property taxes could improve housing affordability for both existing homeowners and eligible buyers. For homeowners, they could reduce the cost of owning their home. For buyers, they could lower the income needed to afford one.

Still, housing affordability remains a challenge in Florida. Even though there are more homes available for sale than before the pandemic, many buyers still struggle to afford them. In fact, our research shows that middle-income buyers can afford fewer than 25% of the homes listed for sale in Florida. The median household in Florida earns about $77,735, well below the $125,200 needed to buy the median-priced home even with lower property taxes. Lower property taxes alone won’t solve the affordability problem. But they could help reduce housing costs for existing homeowners and bring homeownership within reach for more buyers, especially those who are already close to being able to afford a home.

1About 61% of Florida property taxes go to non-school purposes, the part Amendment 3 would reduce.